THIS WEEK FROM WASHINGTON
U.S. House Approves $47 Billion Transportation Spending Measure

HOUSE APPROVES AMTRAK 609M

Washington, July 30 (Bloomberg) -- The U.S. House approved a $46.9 billion
Transportation Department spending bill for next year that includes $609
million to help keep Amtrak running. The bill, approved by a vote of 391-25,
provides $54 million more for the struggling passenger railroad than similar
legislation in the Senate, though it's still $12 million less than the Clinton
administration requested.

Resolving Differences

Negotiators from the two chambers must now meet to resolve differences in the
two measures and agree on a level of funding for Amtrak and other programs.
The House-Senate conference will also have to decide whether to accept a
provision in the Senate version of the bill, sought by Illinois Democratic
Senator Richard Durbin, that would extend a virtual ban on smoking on domestic
flights to include all flights -- including those operated by non-U.S.
carriers -- that touch down on U.S. soil. Smoking is banned on U.S. domestic
flights under six hours in duration and most U.S. airlines already prohibit
smoking on many international flights.

Legislators complained that they had little leeway in crafting this year's
transportation spending bill because of restraints imposed by the six-year,
multibillion dollar highway and mass transit measure enacted earlier this
year. Appropriators provided $26.7 billion for highway construction and
improvements promised in the bill, an increase of 20 percent over this year.
Mass transit programs will get $5.365 billion, about $521 million more than
fiscal 1998.

House Transportation Appropriations Subcommittee Chairman Frank Wolf, a
Virginia Republican, said the earlier highway and transit bill mandated
certain levels of spending for those programs that made it ``virtually
impossible'' to reduce highway spending. Last year, Congress agreed to
provide Amtrak with $2.2 billion for capital improvements over four years to
help it reach self-sufficiency. That legislation allows Congress to end
support for Amtrak in 2002.

Capital Investments

The $609 million for Amtrak in the House bill is intended solely for capital
investments, such as new locomotives and cars and track improvements. The
Senate bill, which provides $555 million for Amtrak, includes a broader
definition of capital expenses to let Amtrak use some of the money to pay for
items that have traditionally been defined as operating expenses, such as
doing electrical overhauls or toilet replacements on existing cars.

The stricter definition of capital investment in the House bill often forces
the railroad to overhaul or even replace an entire car rather than make
cheaper repairs to avoid dipping into limited operating funds. The railroad
will push for the Senate definition of capital investments when House and
Senate negotiators sit down to resolve differences.

Congress has funded Amtrak since it was created in 1971, providing more than
$19 billion. Nonetheless, the railroad continues to lose money. It is
expected to post an $845 million loss this year, according to a recent General
Accounting Office report.

The House bill includes $3.9 billion for Coast Guard activities, $29 million
less than this year. Of that, House appropriators favor spending $406 million
for drug enforcement activities in the fiscal year beginning Oct. 1, an
increase of almost $74 million.

The Federal Aviation Administration would receive nearly $9.5 billion in the
House bill, up from about $9.1 billion this year. Of that, $1.8 billion would
go for new construction and improvements at U.S. airports, up from $1.7
billion. The Senate bill includes $9.8 billion for FAA activities and $2.1
billion for airport construction and improvements.